River And Mercantile Share Discussion Threads

[its the oxman] 11/12/2019 12:35

Added a few today 229p.

[topvest] 28/11/2019 17:55

I’m looking to add a few more.

[its the oxman] 27/11/2019 17:30

Not sure when the good times will come again here, not sure why riv seems so unloved by the market or what's wrong. Patience required I guess.

[speedsgh] 17/10/2019 11:10

Couldn't agree more, topvest.

EDIT - I note the Finals have been released 3 weeks later this year. Last year the Finals were released 24/9 and there was a Q1 Trading Statement released on 31/10/18. So shouldn't be too long until there is another announcement.

[topvest] 16/10/2019 20:23

My average is 239p on my 3 purchases. They have AUM up 18% versus a year earlier, so a good chance of an upgrade as the forecasts appear prudent for FY20. Not yet added a 4th time, but I'm tempted. A quality company in my view, and one to buy on weakness. As a fund manager they are more contra-cyclical than most as well.

[lord gnome] 15/10/2019 22:09

A solid hold topvest, but I see no compelling reason to add. I paid 277p for my holding, so I am well under water. I think that may affect my judgement.

[topvest] 15/10/2019 20:55

A fairly solid set of results here...with good momentum on AUM moving into the current year. I really like this company. They talk a lot of sense, and it's good that the previous CEO is focusing on being the CIO which is obviously where he excels. Will take a look at the FY20 forecast tomorrow, if its been updated on Stockopedia, but maybe time for another top-up. Purchased three times so far.

[rogerbridge] 29/7/2019 10:04

Pleased to have this in my SIPP, a very good update.

[speedsgh] 29/7/2019 09:56

Y-o-Y comparisons for 12 months ended 30th June:

Fee earning AUM/NUM: £39.8bn (2018: £33.8bn) +18%
Net flows: £5.4bn (2018: £2.1bn) +157%
Gross sales: £6.9bn (2018: £5.7bn) +21%
Investment performance added: £0.6bn (2018: £0.7bn) -14%

On outlook...
"We continue to have a positive outlook on markets, which we believe are supported by a stable environment. Globally, valuations still look fair, credit conditions are improving and overall economic conditions are on the up. Accordingly, our River FOURcast is indicating STABLE over the next six month period and we have therefore positioned our client portfolios for continued growth, however, there is obvious political risk in certain markets and we will continue to monitor developments in this area."

River FOURcast is a proprietary economic model developed by R&M which is used to indicate our future views of the financial markets. The model uses a number of economic and sentiment indicators to determine the potential future direction of financial markets as being: "STABLE", "UPWARD RERATING", "APPREHENSION" or "DOWNTURN"

[topvest] 29/7/2019 08:42

Yes, very positive indeed. This asset manager is below the radar, but has a very nice spread of business. I've purchased 3 times now and will buy more on weakness.

[lord gnome] 29/7/2019 08:22

Good update. Things are looking very positive. Market seems to like it as well.

[lord gnome] 04/7/2019 20:52

Reading between the lines of today's holdings RNSs, it looks like Punter Southall have sold a decent stake (circa 6 million shares) to Miton Group. Good to have Miton on board.

[topvest] 29/4/2019 13:27

Yes, a nicely balanced business this. Happy to hold long term. Purchased three times so far, and may have another dabble soon.

[its the oxman] 29/4/2019 08:13

Would be nice to crawl back to 300p , but it seems a long way off at the moment.

[rogerbridge] 29/4/2019 08:10

Good progress.

[lord gnome] 29/4/2019 08:02

A good update. Things are moving in the right direction. Let's see if the market thinks the same.

[its the oxman] 05/4/2019 16:45

Next update for quarter ending 31st March should see aum up strongly. With plenty of director buying at higher levels these continue to look very good value. Seems to me it's just the current / and hopefully temporary phase of significant investing to grow which is depressing eps and the share price and that won't last forever.

[rogerbridge] 15/3/2019 20:47

Bought some at the end of March for the dividend.steady as she goes.

[its the oxman] 12/3/2019 11:07

Remains cheap and overlooked. Solid hold for some or a decent buy perhaps given plenty of upward scope if one is patient and market levels pick up , and a nice div to collect as well.

[essentialinvestor] 11/3/2019 11:17

I'm struck by where the CEO thinks we are in his 4 phases analysis.

Clearly a very good call to up client equity exposure in January,
that has to be said - but was the back end of last year really a downturn?,
It was not bear market. I'm not sure I follow the logic that we are now
set up for multi year positive returns from equities?

Anyone have some thoughts on this ? Thanks.

[speedsgh] 11/3/2019 10:57

Interim dividend (including special) is down 17% as a result of the more muted business performance in the first half...

The Board of Directors have declared an interim dividend of 6.3 pence per share, of which 2.0 pence is a special dividend and relates to net performance fees. The dividend will be paid on 12 April 2019 to shareholders on the register as at 22 March 2019. The ex-dividend date is 21 March 2019.

[2018 interim: 7.60p, of which 2.20p was a special dividend]

[speedsgh] 11/3/2019 10:54

Preparations for Brexit

We have established a Brexit working group led by our in-house legal team and overseen by the Board, who have conducted a thorough analysis of the Group's activities and the potential impact of Brexit.

Based on the geographical location of our client base, the jurisdiction of our funds and the advanced state of agreement on a memorandum of understanding between the FCA and ESMA, we do not believe that our business will be significantly impacted by Brexit however our preparations for the various Brexit outcomes, including a "no deal" departure on 29 March are advanced and ongoing.

[speedsgh] 11/3/2019 10:53

They appear confident enough to go against the flow & invest at a time when many other businesses are doing exactly the opposite...

Investment opportunities

Another strategic area of focus I highlighted previously was that we would look to acquisitions to grow faster. We continue to believe that there are opportunities in this area, particularly where they add relevant distribution capability to give better access to clients who have need for our solutions or products, generally through expanded presence with client types or geographies.

Whilst we continue to look for the right acquisitions, we have stepped up considerably our investment within the business to grow (which is reflected through the income statement in the form of a margin reduction). These investments currently are the ILC team, the New York and Australian presences, and the new product development and launches, as discussed above.

These are naturally impacting the rate at which we achieve our profit margin objectives at an overall Group level as they only account for limited revenue at present, which we obviously expect to grow over time. They therefore put some downward pressure on our adjusted underlying margin - which would be 29% in their absence, very close to my medium-term strategic target of 30%.

Hence, in the absence of this investment, we are relatively close to achieving our medium term profit margin targets, in spite of headwinds. Our challenge is clearly to leverage these investments into revenue. Very simplistically, we need to deliver several million of additional revenue to justify these investments and we believe there is significant capacity to achieve this.

More generally, we do see a wide range of opportunities to invest ahead of us, at a time when many others are retrenching. This includes both traditional business acquisitions, but also the hiring of individuals and teams which are generally funded through the remuneration line in the income statement. We expect to make further such investments to increase our growth rate. We will continue to report on these investments and identify progress on our underlying profit margin.

[speedsgh] 11/3/2019 10:50

I do appreciate the straight-talking narrative in RIV results announcements. As always some useful insights contained within. Interesting to see where they thing we are in the cycle...

Interim Financial Report for the six months ended 31 December 2018 -

Investment performance

Underpinning the way in which we help clients frame their investment decisions is our "Four Phase" approach. I explained the background to this in my last report for the year-ended June 2018. But as a quick re-cap, the four phases are as follows:

· Generalised upward re-rating - most risk asset classes rise at the same time. This phase always occurs from markets being cheap.

· Stable conditions - economically everything is at least ok, credit conditions are generally supportive and markets are neither very cheap nor very expensive.

· Apprehension - markets are expensive yet still keep on rising, generally supported by credit conditions.

· Downturn - markets fall, or get ready to do so and this is generally coupled with worsening credit conditions and/or poor economics.

In my last report, released in September 2018, I identified that we believed we were in a "Downturn". This view had influenced the advice given to clients and also the positioning of Fiduciary Management and macro portfolios. This view clearly turned out to be correct and we saw significant equity and credit market falls during the following period. The defensive nature of these portfolios is also a reason why our exposure to the downturn in markets was more muted.

The dynamic nature with which we are able to manage portfolios is also supportive of delivering long run investment performance at a Group level. In early January, we made a decision to re-allocate to risk assets, particularly equities, and as a result have benefited more from the subsequent rise in markets so far during 2019 than we lost in 2018.

Looking out, we believe that while the economic risks may persist, the environment is broadly supportive of risk assets and also that this should be a good year for our value strategies. At this stage, my best guess is that the investment performance contribution for our financial year 2019 will be positive to a small degree, and that in the next few years there will be strong returns from equity markets, particularly in Asia and Emerging markets. Our value equity strategies have certainly started well, as have our Fiduciary and Global Macro strategies...

[rogerbridge] 11/3/2019 09:20

Steady as she goes and collect the dividend.